MUMBAI: Qatar Airways and the state-run Qatar Investment Authority plan to start a domestic airline in India, the gulf carrier’s CEO said Wednesday. If the plans fructify, this will be the first instance of a fully foreign entity-owned local carrier in the country, after Prime Minister Narendra Modi opened up the sector for 100% FDI last June.
“We will soon be making an application to that effect. And from there we will proceed,” Akbar Al Baker told a press conference in Berlin.
“Yes we will have a 100% owned domestic carrier in India that will belong to both Qatar Airways and our state investment arm as India has now allowed foreign direct investment in domestic carriers within India,” he added. He said he aims for the airline to eventually have a fleet of 100 planes.
India on June 21 last year allowed 100% foreign direct investment in its airlines, up from 49% previously. A foreign carrier can, as before, hold up to 49% stake but other foreign investors can fully own the airline.
Qatar Airways, led by Al Baker has been making constant efforts to make a significant headway in to the Indian aviation industry. Al Baker has in the past publicly expressed his intentions of buying a stake in the country’s largest carrier IndiGo, but the talks haven’t fructified. He has also aggressively advocated the concept of Open Skies or unlimited flying rights between the countries. Qatar and India currently work on bilateral air service agreements under which both carriers from both countries can operate a stipulated, equal number of flights on either air route.
The Indian air travel market, the fast growing in the world, is key to Qatar’s plans of challenging the aggressive expansion of its two mighty rivals Dubai’s Emirates and Abu Dhabi-based Etihad Airways. Emirates has the greatest chunk of bilateral rights to India while Etihad, along with strategic partner Jet Airways ferries the largest number of international passengers out of the country. Etihad owns a 24% stake in Jet.
There are questions however on whether the Indian government will allow a fully foreign-controlled local airline entity to operate. Currently, substantial ownership and effective control (SOEC) needs to rest with an Indian entity in the country’s aviation industry. That government hasn’t announced any modifications yet to that rule, even post its decision to allow 100% FDI in the country’s carriers.